Title: How a consolidation loan can help you get back on track

School fees, stationery and uniforms; credit card payments, utility bills, and outstanding debt… January comes with a lot of baggage. Now that the festive season is over, you're probably thinking about how you’re going to start paying off that debt. In fact, paying off any debt incurred during the holidays should be your priority right now. And if you took out multiple loans during the year, now is a good time to tackle all of your debt at once. A consolidation loan is your best option. It's a good way to close off all payments and help you make a fresh start. It's also the first step to repairing your credit score.                                       

Should I apply for a consolidation loan?

A consolidation loan would be ideal if:

  • You've lost track of your creditors and how much you owe them.
  • You've taken out a loan to settle your debt.
  • A large chunk of your income is allocated to paying off debt.

Applying for a consolidation loan is a good way to:

  • Pay multiple creditors at once.
  • Settle your debts with one payment.
  • Improve your credit score by successfully paying off your debt.

But before you apply for a consolidation loan, you have to understand your finances. Credit providers generally consider the following factors to see if you can afford the loan:

  • Every day expenses like your bond, food costs, and transport.
  • Income after tax.
  • Other large expenses such as your medical aid, insurance, and debit orders.

These are important elements that you must consider because they impact the amount left over that you can use to pay your loan.

Consider taking out a Consolidation Loan at African Bank

Did you know that you can combine up to five loans into a single consolidation of up to R250,000? What’s more, the application process is fairly easy. Just make sure that you have your latest bank statements reflecting your last three salary deposits and your most recent payslip. You can even apply online.

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